* Tax Funding of MOFD

On October 19, 2016 the MOFD Board is going to talk about the tax funding of MOFD by Orinda and Moraga taxpayers. The issue to be discussed is whether the tax payers of Orinda are paying their “fair” share of MOFD’s tax revenue. This essay briefly discusses the issue and points to more detailed information.

1) Is this even an issue? Is there any basis for Orinda taxpayers’ concerns?

Yes. MOFD was formed in 1997 by a vote of the people which was called by the County Board of Supervisors at the request of the Orinda City Council. In the voters’ pamphlet for that election (November 3, 1997; Measures A, B and C), the Orinda City Council, duly elected representatives of the residents of Orinda, which worked with the Moraga Town Council and the County to define the rights and responsibilities of the newly formed MOFD, told the voters that if they voted to create MOFD that this would “Insure that fire protection dollars Orindans pay will stay in Orinda.” By “fire protection dollars” it will be assumed they meant the portion (about 23%) of the basic 1% property tax allocated to MOFD plus the “fire flow” parcel tax. And by “stay in Orinda” it will be assumed they meant used for services in Orinda. For more details see.

2) What defines Orinda? Incorporated Orinda has well defined boundaries and for property tax purposes it is also well defined with nine Tax Rate Areas having a five digit number starting with 180xx. However, within MOFD the definition is a bit cloudy. First, Orinda MOFD stations are primary responders for areas outside of incorporated Orinda. There are only a few homes outside of incorporated Orinda which generate about $20,000 of property taxes (vs. $14.6 million for incorporated Orinda).

But then there is South Orinda; specifically Tax Rate Area 18012 from Ivy Drive south which has about 700 homes and generates about $1 million of property taxes. When MOFD was formed, this area was served by the Moraga Fire Protection District and paid the Moraga Fire Flow Parcel Tax. The reasons were obvious. Moraga provided much better service. They had a paramedic ambulance while Orinda had to rely on AMR service from Walnut Creek which is important since 90% of all emergencies are medical in nature. This was one of the key drivers for Orinda to form MOFD since they had only 13% more responders (9 vs. Moraga’s 8) but were paying 40% more in taxes to the County than Moraga taxpayers were paying.

Given the service in existence today, would this area still be serviced by Moraga? There is now a paramedic ambulance stationed at South Orinda’s Station 44. It is closer to Del Rey School and as close to OIS as is the ambulance stationed at Moraga’s Station 41. Station 44 is three minutes from Miramonte High School. Station 44 can provide paramedic response times to all of South Orinda in under MOFD’s six minute response time benchmark. In a 2009 study of response times, almost 40 percent of all Orinda emergencies were not responded to within the six minute benchmark. Station 44 can provide fine service to South Orinda. While it is nice to have mutual aid from Moraga’s Station 41, just like Station 44 provides mutual aid to Moraga incidents, South Orinda is part of incorporated Orinda and can be well serviced by Orinda’s MOFD assets.

Conclusion: Incorporated Orinda and a portion of unincorporated Contra Costa defines “Orinda” for the purpose of this exercise.

3) How much tax revenue do “Orinda” and “Moraga” provide to MOFD? This is well defined and can be provided by the County’s Controller’s office. For 2016/17, Orinda taxpayers provide about $14.6 million ($14.0 million portion of the ad valorem tax and $600,000 fire flow parcel tax). Moraga taxpayers provide about $7.9 million ($7.4 million portion of the ad valorem tax and $500,000 fire flow parcel tax).

4) The more complicated question is, “what is the value of services that MOFD provides to each community?” For this question to be answered and then monitored in the future, some simplifications should be adopted so as not to turn the answering of the question into a massive accounting task.

First, what services does MOFD provide? For the most part, they provide emergency response service. They do monitor weeds, provide CPR classes, plan check, maintain hydrants, etc. etc., but hopefully it can be assumed that these services are spread ratably across the community in proportion to population and do not cost all that much.

Most of MOFD costs are for its firefighters. In the current budget (2016/17) about 86% of all expenses are for salaries and benefits with about 80% for firefighters and 20% for administration. It could easily be assumed that the administration was for administering to the duties of the firefighters and therefore administration expenses should just be allocated as firefighter expenses are. With nine firefighters stationed in Orinda and eight in Moraga, Orinda would be allocated 53% of the labor costs which 45.5% of the total expenses while Moraga would be allocated 40.5%.

The remaining 14% is split about 10% for operations and 4% going to the capital equipment fund. How should these be split? Three of five stations are in Orinda (60%). About 53% of all incidents are in Orinda with 47% in Moraga (the same ratio as firefighters stationed). By station? By incident? An average? Assuming an average, of the 14% of expenses being operational, 7.9% would be allocated to Orinda and 6.1% to Moraga.

The total Orinda allocation would then be 53.4% of expenses while Moraga would be allocated 46.6%.

5) Comparing expense allocation to taxes paid. The total tax paid for this year is $22.5 million. If Orinda were allocated 53.4% of that they would owe $12.0 million and Moraga taxpayers would owe $10.5 million. But Orinda taxpayers are paying $14.6 million, $2.6 million in excess, and Moraga taxpayers are paying $7.9 million; $2.6 million too little.

It appears that the promise made to Orinda voters in 1997 that Orinda taxes would stay in Orinda is not being upheld.

6) Are there factors not addressed above? Adjustments to taxes paid or services received?

In the past, MOFD has claimed that Orinda residents received significant service from Moraga-based responders and that Orinda should thus pay not just for the nine responders stationed in Orinda but a portion of the costs to operate the Moraga stations. This claim was based on “first due” maps presented at the first set of Tri-Agency meetings in 2009. The claim was repeated at the second set of Tri-Agency meetings held in 2010 & 2011.

In 2012, the Orinda Emergency Services Task Force, a group of independent citizens, presented a 90 page report to the community. In it was included an analysis of all 4,832 MOFD equipment operations in 2009; raw data provided to the Task Force by MOFD. What the analysis showed was that while Moraga did provide 463 operations to incidents outside of Moraga (20% of its total operations), Orinda reciprocated with 361 operations. The net Moraga operations in “mutual aid” were thus 102 with nine being engine operations and 93 being (two man) ambulance operations. That was 2009 when Orinda only had one ambulance stationed downtown. Now it has, in addition, an ambulance stationed in South Orinda. Are there now more than a handful of net ambulance operations from Moraga to Orinda or are there any? And how much “should” Orinda pay for less than two ambulance operations per week? What would AMR charge? What is the extra cost to MOFD? What do other districts charge for that level of mutual aid?

7) Is it clear what “fair” means with respect to Orinda and Moraga sharing the costs and benefits of MOFD? Not to everyone.

The 1997 Orinda made it pretty clear for Orinda when they told the voters that Orinda tax dollars would only be used for service in Orinda. We know how many Orinda tax dollars are going to MOFD but there is no accounting for what Orinda’s services cost so we don’t know if that pledge is being upheld.

Another thought is that, since 23% of Orinda’s basic one percent property tax is allocated to MOFD while only 19% of Moraga’s is allocated to MOFD, if these two allocations were equal that this would be “fair”. Note that Orinda’s tax base ($6.2 billion) is equal to about $330,000 per capita while Moraga’s tax base ($3.9 billion) is only about $230,000 per capita. This would still produce more cost Orinda taxpayers more per capita and does not address this issue of how much service each community gets for their tax contribution.

A third thought is that the current funding is just fine even though Orinda tax payers are paying $780 per capita while Moraga taxpayers are paying $460 with each receiving about the same service from MOFD (4.8 firefighters per 10,000 population stationed in each city).

To the extent that Orinda taxpayers are not seeing all of their tax dollars used for services in Orinda as was the original definition of “fairness”, someone, be it MOFD or the City of Orinda, should notify them that the rules have been changed. And when defining "fairness" they need to remember that there are two components: (1) What Orinda is paying for service and (2) what service Orinda is recieving for those payments.

Conclusion

MOFD was supposed to be a partnership with Orinda tax dollars staying in Orinda and, conversely, Moraga tax dollars staying in Moraga. Due to “circumstances”, Orinda taxpayers are now paying 25% of Moraga’s emergency services cost. That was not the deal described to the Orinda voters in 1997. Orinda residents are foregoing $2.5 million of safety improvements each year making Orinda less safe than it should be.